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BUSINESS WITH PERSONALITY

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FTSE 100 5,412.88 +15.02 DOW 10,428.05 -120.46 NASDAQ 2,269.15 -22.13 /$ 1.62 unc / 1.13 unc /$ 1.43 unc Certified Distribution02/11/09 29/11/09 is 102,194

Chen looksfor 200min flotation

SANDY Chen, the former PanmureGordon banking analyst, is aiming toraise around 200m within the nextcouple of weeks for his new bankinggroup.

Investor research on the new ven-ture has been issued in the past few days and Chen will be marketing the

vehicle to potential investors this week with a view to raising money next week. Panmure Gordon is

behind the project, as an adviser.

The new bank plans to raisedeposits from affluent individualslooking for better interest rates thanthose available on the high street. It

would then use these funds to lendmoney to medium-sized businessesthat have been struggling to accesscash during the credit crunch.

One source close to the fund-rais-ing said the banks selling point isthat it is a traditional bank withstrong IT systems and it is is entirely clean and straightforward.

CityA.M.has learnt that the formerBarclays chairman Sir PeterMiddleton, who is in his mid seven-

ties, will be acting as a senior consult-ant to the group. The groups working title has been

Bank of Britain but it will be renamed before launch.

BY DAVID HELLIERBANKING

M&S chairman and chief executive Stuart Rose Picture: Micha Theiner/CITY A.M.

HIGH street bellwether Marks &Spencer is this week expected toreport its first sales growth in two

years, boosting hopes that British con-sumers have cast aside their gloomand started spending again.

The retail giant will update themarket on Wednesday on how itfared over Christmas, with analystsexpecting M&S to post like-for-likesales growth of around one per cent a massive improvement on last yearssteep 7.1 per cent drop when con-sumers were in the grip of recession.

The apparent improvement in con-sumer confidence is backed up by fig-ures from card payment processorBarclaycard Payment Acceptance,

which showed sales were up 2.4 percent on 2008 over Decembers finalfortnight.

But the British Retail Consortiumhas warned consumer spending may hit the skids again in 2010, withtough trading ahead and VAT hiked.

Spokesman Richard Dodd said: Ithas clearly been a better Decemberthan last year, when total sales weredown 3.3 per cent. This Christmas isnot going to have been a bonanza by any means, but consumer confidencehas improved.

There are still some big clouds onthe horizon for 2010 so even if there-are good results for December, thatdoesnt mean all our problems are

behind us. There is the threat of ris-

ing unemployment, tax increases,and rising housing costs, which are

big factors that curtail spending, hesaid.

M&S will follow positive reportsfrom other spending barometers,such as John Lewis and Waitrose,

which have also posted strongChristmas results.

Ocado, the online food retailer, saw a 30 per cent leap in underlying salesin the four weeks to 26 December.

The company, which is considering astock market flotation, saw sales of 41m, with a 49 per cent leap in salesin the Christmas week. Meanwhile,Selfridges is expected to report a 16per cent increase in sales overDecember, compared to 2008, and

John Lewis reported a 24 per cent risein Christmas Eve sales.

Analysts will be looking to furtherpositive news from the slew of retail-ers due to update the market thismonth including Next, J Sainsbury and Debenhams.

Barclaycard Payment Acceptance, which processes credit and debit cardtransactions for 88,000 UK retailers,said consumers spent 4.09bn ontheir cards between 19 and 31December, up from 3.99bn in 2008.

The busiest day was 23 December, when 497m was spent on last-minute Christmas shopping.

Don Williams, head of retail atBDO LLP added: Homewares havetraded particularly strongly as shop-pers invest in big ticket purchases

before the VAT rise.

M&S LEADS HIGHSTREET RECOVERY

BY RACHEL STEVENSONRETAIL

www.cityam.comIssue 1,043 Monday 4 January 2010 FREE

RUSSIANPAY-DAYNM ROTHSCHILD

CLEANS UP INRUSAL FLOAT P9

ROONEY AND MAN UTDHUMBLED BY LEEDS

UPSET REIGNITES FA CUPP20

BUSINESS WITH PERSONALITY

Bernanke defends Fed record but hints at rate rises to come

BEN Bernanke staged a robust defenceof the US Federal Reserves loose mon-etary policy in the years running upto the sub-prime crisis yesterday.

The Fed chairman argued that laxregulation rather than the low cost of

borrowing was to blame for the

American housing bubble that beganto burst in 2006. Nonetheless, he hint-ed interest rates may have to be usedmore aggressively in the near futureto curb excessive asset price rises.

Critics say the Feds policy of rock- bottom interest rates in the early 2000s fuelled the surge in houseprices which precipitated the finan-cial crisis. Many believe the Feds insis-

tence on holding rates close to zerosince December 2008 is already indanger of causing a fresh bubble.

But Bernanke said exotic new mort-gages and irresponsible lending were

behind the booming property market,factors he said pointed to the need forimproved regulation.

Speaking at the AmericanEconomic Associations annual meet-

ing, Bernanke said: However if ade-quate reforms are not made, or if they are made but prove insufficient toprevent dangerous build-ups of finan-cial risks, we must remain open tousing monetary policy as a supple-mentary tool.

He added: We still have much tolearn about how best to make mone-tary policy and to meet threats to

financial stability in this new era. A hike in US interest rates would

put the brakes on the healthy rally enjoyed by US stocks last year, whichsaw the S&P 500 end the year 23.5 percent up. While many fund managershave complained of the dash fortrash caused by huge injections of liquidity, bears warn that a rise inrates could stifle the recovery.

BY OLIVER SHAHUS ECONOMY

The hugely experi-enced Sir PeterMiddleton will be acing as a consultant toChens new group

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News2 CITYA.M.4 JANUARY 201

Giant TowersWatson listed

TOWERS Watson begins trading asthe worlds largest employee benefitsconsultancy today, pushing Mercerinto second place.

The firm, the fruit of a $4bn(2.5bn) merger between Watson

Wyatt and Towers Perrin, listed itsshares on the New York Stock Exchange and Nasdaq this morning.

In a statement, Towers Watson saidit would issue $200m in cash and one-

year notes worth a further $200m tocertain shareholders who chose toend their employment with TowersPerrin as a result of the deal.

With 14,000 employees and rev-enues of more than $3bn a year,

Towers Watson will be a major playerin the human resources space.

Watson Wyatt chief executive John

Haley becomes CEO of the mergedentity, while Towers Perrin CEO Mark Mactas will serve as chief operatingofficer. Both men hailed the tie-up,claiming Towers Watson would beuniquely positioned to deliver

value to clients and shareholders.

However, analysts have remarkedthat the merger reflects the hardtimes faced by the consultancy indus-try, which has struggled in the reces-sion as customers cut back ondiscretionary projects. The merger isexpected to save the companies $80ma year over three years.

BY OLIVER S HAHCONSULTANCY

Why 2010 will be make or break for UK

IT is hard to believe that just three years ago the UK economy was still being lauded as a great success story;our fall from grace has been spectacu-lar. In 2007, London was overtakingNew York as the financial capital of the world, with a resurgent Britanniagracing the covers of US news maga-zines; today, as the new decade begins,

we are being bracketed with the likesof Italy and Greece as nations thatmight soon default on our nationaldebt.

Of course, we remain a wealthy nation and London a prodigious

financial powerhouse. We are nolonger in recession, the banks arerecovering, the equity and credit mar-kets are doing well, unemployment isimproving and global demand is

bouncing back. But to mention all of this is to miss the point: 2010 will bethe year we either face up to our over-sized public sector and runaway budg-et deficit or the year our bubbletruly bursts, puncturing with it all of our illusions of prosperity.

The last couple of years have beenextremely tough, with the economy shrinking drastically and hundreds of thousands losing their jobs; but muchof the necessary adjustment has beendelayed. The property and financial

bubble has been replaced by a publicsector bubble, propped up by quantita-tive easing, the Bank of Englandsgreat gilt-buying experiment. TheOECDs latest stats suggest that publicspending will account for 54.1 percent of our GDP this year; one poundout of five of this will be borrowed, adangerous and unsustainable state of

affairs, especially when quantitativeeasing is finally halted at some pointthis year. The deficit is set to remainstuck in double-digits for the foresee-able future, with the national debt on

course to hit 100 per cent of GDP mid-decade. It is the kind of trajectory that would have made Icarus proud.

Gordon Browns implicit claim on Andrew Marrs BBC show yesterday that his 50p top tax rate and otherhikes will be enough is laughable. Thedeficit will be at least 180bn this

year; the taxes in question are expect-ed to raise under 5 per cent of what isneeded (and in practice will yield evenless). The Tories plans are barely any

better: they have yet to explain in any detail where they will find theremaining 95 per cent.

Most consumers and investors dontfully grasp the extent of the cutbacks(and likely tax hikes) that will be nec-essary to put us back on track, partly

because the politicians have failed to be honest about the scale of the crisis. The public is aware that we are in

trouble; but it has yet to accept thatIrish-style swingeing spending cuts,including public sector pay reduc-tions, are now looking inevitable. This

will make it even harder for any party

to take truly tough decisions andhence make a ratings downgrade,sharply higher interest rates and asterling crisis more likely.

The problem with reality is that iteventually catches up with us.Governments cant go on spending asmuch as they want forever; like therest of us, they have a budget con-straint. How we deal with that reality

will be the story of the year; in theshort-term at least, the election will bea mere sub-set of this greater story.

The winners job will be to ensure thatthe 2010s dont turn out to be another1970s, a wasted and debilitatingdecade of decline and IMF bailouts.

Fortunately, Im an optimist by nature which is why I still fell able to

wish all of our readers a very Happy New Year. Its good to be back.

[email protected]

OMEGA Insurance is under increas-ing pressure to replace the directorsof its board after Invesco Perpetual,its largest shareholder, secured the

backing of other investors to requesta special general meeting.

Neil Woodford, Invescos star fundmanager, wants to oust WalterFiederowicz and replace him with for-mer Benfield man John Coldman aschairman of the Lloyds of London

insurer. He also wants to replaceChristopher Clarke with James Bryceas Omegas deputy chairman andinstall four additional directors.

Since Christmas, Jupiter AssetManagement, Aviva, Threadneedle,

JO Hambro and Omega co-founder John Robinson are understood tohave backed Invescos call.

A spokesperson for Omega wasunavailable last night. However inlate December the board said it want-ed an outcome that avoids the needfor a special general meeting.

BY OLIVER S HAHINSURANCE

Omega board faces co Invescos Neil Woodford wants change at Omega Insurance

NEWS | IN BRIEF

OFT chief slams puerile RyanThe UKs business regulator has blastedIrish airline Ryanair for its practice of levying a fee for paying by card onlinelate in the booking process. JohnFingleton, chief executive of the Office of Fair Trading, described the tact ic aspuerile and almost childish, adding:

Its almost like taunting consumers.Icera plans listing worth $1bnIcera, the Bristol-based wireless chipmanufacturer, is reported to be planninga stockmarket listing worth up to $1bn(618m). The firm, founded in 2002 andfunded by investors including 3i, has yetto turn a profit, but is thought to beexpecting a breakthrough year in 2010.

Goldman mulls overseas moveGoldman Sachs has begun a review of its London operations that could resultin entire departments moving abroad toescape increasing UK taxes, it wasreported today. The investment banksproprietary trading arm, forex tradingteams and back office operations are allthought to be under review. City A.M.understands Goldman is considering alloptions, and will rule nothing out.

Watson Wyatts JohnHaley will become CEOof the merged entity,whose shares starttrading today

2ndFloor14-16 Dowgate HillLondon EC4R 2SUTel: 020 7015 1200 Fax: 020 7248 1729Email: [email protected] www.cityam.comEditorialEditor Allister HeathDeputy Editor David HellierNews Editor Ben GriffithsActing Night Editor David CrowFeatures Editor Jeremy HazlehurstArt Director Darren SoulsbyPictures Alice HeppleCommercialSales Director Jeremy SlatteryDeputy Sales Director Harry OwenHead of Distribution Nick Owen

Editorial StatementThis newspaper adheres to the system of

self-regulation overseen by the Press ComplaintsCommission. The PCC takes complaints about theeditorial content of publications under the EditorsCode of Practice, a copy of which can be found at www.pcc.org.uk

Distribution helplineIf you have any comments about the distributionof City A.M. Please ring 0207 015 1230, or [email protected]

EDITORS LETTER

ALLISTER HEATH

UK DEFICIT WARNING FROM CITYECONOMISTSBritain is in danger of succumbing toa budgetary crisis this year, with theeconomy likely to stay in the dol-drums until at least the end of 2010, aFinancial Times survey of economists

warns. Asked to name the three biggest risks to the economy, 37 of the 79 economists polled said the UK

was threatened by a fiscal crisis thatcould derail any revival.

WALMART AIMS AT CUTTING SUPPLYCHAIN COST

Walmart is launching a drive this year to cut billions of dollars of costsfrom its supply chain by combiningits store purchasing across nationalfrontiers in a new stage in the global-

isation of its business. It wants to buy-goods directly from manufacturers.

HOUSE PRICES FACE DECADE OF 'SO-BRIETY'House price growth threatens to belimited for the next 10 years becauseof the damaging legacy of theNoughties, new analysis suggests. Thelast decade has led to a polarisation of rich and poor, as well as a dramaticshift in house building from detachedhouses to flats, research by Savills for

The Daily Telegraph shows.

EQUITIES ARE 'PREFERRED ASSETCLASS' IN 2010Despite a sharp rebound in equity prices during 2009 there are moregains to come, according to strategistsin the City of London. However, thesegains will be limited. Equities are ourclear preferred asset class and are inour view more attractive than credit,cash or real estate, says Robert

Quinn, European equity strategist atS&P Equity Research.

WHAT THE OTHER PAPERS SAY THIS MORNING

SIR MARTIN SORRELL SEES WESTERNEUROPE LAGGING BEHIND IN 2010Sir Martin Sorrell says he believes

western Europe is set for a slow climbout of recession this year. The chief executive of media giant WPP saidthat he expects western Europe tohave it the toughest and lag behindthe rest of the world.

AEGIS IS FORCED TO REVEAL ADDISCOUNTS

Aegis, the advertising group, has beenforced to open the books of itsGerman operation as a bitter two-yearlegal row with yoghurt makerDanone heats up. The ruling couldlead to Aegis being forced to pay Danone millions of pounds in com-pensation for allegedly failing to passon discounts from TV groups and

newspapers. The ruling relates to addiscounts between 2003 and 2005.

FAILINGS AT BANKS TO BE LAID BARE An official investigation into theproblems at Britains failed banks hasrevealed a litany of internal break-downs and flawed controls thatmased the full extent of their failings.

The Financial Services Authority, theCity regulator, has been conducting afull-scale supervisory review of RoyalBank of Scotland, HBOS and Bradford& Bingley since last April. A report onthe findings is expected to be pub-lished within weeks.

MADOFFS UK ARM IS WOUND UPBernard Madoffs London-basedinvestment business has been formal-ly placed into liquidation, a movethat could shed new light on thefraudsters operations. Liquidators

were appointed on Thursday to windup Madoff Securities International,

which has been described as a person-al piggy bank for Madoff.

HOME LOANS MARKET IS REAEXPAND, BUT AT A HIGHER PRIHomeowners have been warned thatmortgage rates will increase in thenext 12 months, adding thousands tothe cost of many loans. Borrowers will

be affected as banks and buildingsocieties come under pressure to passon the higher costs of funding new loans. Economists warned that theprospect of a hung parliament orLabour victory would add to jittersabout the economy.

TAXPAYERS FACE BIG BILL AS BSPURN FUND TO HELP SMALLNESS

The Government is struggling to raise1 billion from banks to finance itsmuch-delayed National InvestmentCorporation (NIC), a fund to helpsmall businesses, and may have to

contribute a large amount of taxpay-ers money to hit its target.

TODAYTHE SUNDAYS

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SENIOR politicians were busy draw-ing battle lines at the weekend afterthe New Year heralded the start of thegeneral election campaign proper forthe major parties.

Prime Minister Gordon Brown saidhe was confident there will be aLabour Budget this spring, castingdoubt over the likelihood of the party calling an early election, though he

was adamant he would not be boxedin over a specific date.

Speaking on the BBCs Andrew Marr show, Brown attacked Tory plans for swift and brutal cuts to the

burgeoning government deficit,claiming that Labour is the only party equipped to take the country fromrecession to growth.

I believe in an age of aspiration,opportunity and prosperity, headded. Im afraid the Conservativeshave gone for an age of austerity.

The Prime Ministers remarks cameafter shadow business secretary Ken

Clarke hinted in a newspaper inter- view at future tax rises under a Tory government, continuing along DavidCamerons well-trodden hard line onrepairing the UKs finances.

It would be folly to start ruling outincreases in taxation if it turns out to

be extremely difficult to get publicspending under control rapidly enough, he said. If you cant get itdown quickly enough in order tomaintain the confidence of the mar-kets and to create conditions forgrowth and employment then youmay have to look at tax increases.

Clarke previously showed himself unafraid to put up taxes when, aschancellor, he was tasked with bring-ing the UK out of its last recession inthe early 1990s.

Clarke also admitted that educa-tion may be hit by sweeping publicsector cuts proposed by the Tories.

I dont think you can exempt edu-cation...from the need for a review,

because there are always better waysof doing things and better value formoney, he said.

Brown castsdoubt over anearly election

FORMER Citigroup chief executiveSanford Weill has blamed the banksrecent problems on personnel deci-sions and blamed his successor,Chuck Prince, for letting its balancesheet balloon and for taking on largerisks, according to the New York

Times, citing a series of recent inter-

views.One of the major mistakes that I

made was my recommending Chuck Prince, Weill told the paper, refer-ring to his handpicked successor, whoheaded Citi from 2003 to 2007. Thenewspaper reported that Weill andPrince are no longer on speakingterms. Weill, who built Citi into asupermarket bank through a seriesof acquisitions and retired as CEO in

2003 and as chairman in 2006, saidCitis structure was not to blame forthe banks woes, saying managementfailed.

Weill, 76, was being interviewed by the newspaper about the circum-stances that led Citigroup into beingforced to go to the US government forfinancial support during the depthsof the recent banking crisis. The bank has since repaid some of its loans.

Weill lays the blame on his succesPrince for big problems at Citigrou

BY V ICTORIA B ATES

POLITICS

BY H ARRY B ANKS

BANKING

News 3CITYA.M. 4 JANUARY 2010

THE PHONE GOOGLE HOPES WILL CRUNCH APPLE

GOOGLE will gohead to head with

Apple this weekwhen the internet

giant unveils itsnew Nexus Onesmartphone. Theinternet giant has

been desperate tomuscle in on thelucrative consumer mobile market that has been such asuccess for Apple.

Early claims saythe phone will ini- tially be availableon T-Mobile in theUS and is eventhinner than theiPhone.

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VIRGIN Money hopes acquiring a bank as early as this month couldhelp the company become a majorplayer in consumer finance.

It has already approached QuayleMunro, the bank founded by the cha-riman of parent company VirginGroup, to advise on a transaction.

It is thought Virgins banking arm will focus on providing a comprehen-sive online banking service.

A Virgin Money spokesman said:We applied for a banking licence inOctober and this should comethrough later this month at the earli-est or March at the latest.

Things will start to come tofruition in the weeks after that.

Reports emerged over the weekendthat Aldermore Bank, formerly

Ruffler Bank, owned by private equity firm AnaCap, was top of QuayleMunros wish-list, costing around

50m.But a Virgin Money spokesman

spokesman denied the bank figuredin its plans, claiming: The institu-tion mentioned over the weekend isnot correct. We are not commentingon which banks are being looked at.

It is thought that the acquisition of a small bank will be the first move ina larger programme, which is likely to include snapping up assets of RoyalBank of Scotland, Lloyds BankingGroup and Northern Rock.

Virgin failed to buy Northern Rock for an initial 1.3bn investment in2008.

Virgin denied there was any con-flict of interest in hiring the company founded by the chairman of VirginGroup to advise on the acquisitions. A spokesman added: Peter Norris is thechairman of Virgin Group, not VirginMoney. We have a longstanding rela-

tionship with Quayle Munro andthere is no conflict of interest as faras were concerned.

Virgin closeto bank dealBY S TEVE D INNEEN

BANKING

THE Financial Services Authority (FSA) has heaped pressure on themutuals industry, according to thechairman of an all-party parliamen-tary group for building societies andfinancial mutuals.

Adrian Bailey told City A.M. that aletter urging with profit mutuallife assurers to consider their finan-cial viability or consider winding-

down had heaped pressure on theindustry. FSA managing director of supervision Jon Pain sent an open let-ter to the 57 CEOs of mutual lifeassurers and friendly societies urgingthem to consider their long-term via-

bility. The letter asked that the firmsrespond by the end of last year.

But Bailey said the letter wasunhelpful and could be seen tohave had a detrimental effect.

He said: I think the FSA has provid-ed a degree of uncertainty the mutu-

al industry could do without. An FSA spokesman said no deci-sions had been made about specificinstitutions. He said: It is certainly not the case that the FSA will be clos-ing companies down.

We are encouraging a discussion with mutuals and invited them tolook at their with-profits business.

Mutuals and friendly societies areowned by their customers, who

become members when they buy awith-profits life assurance policy.

FSA is accused of heapingpressure on mutual assurersBY S TEVE D INNEEN

FINANCIAL SERVICES

News4 CITYA.M. 4 JANUARY 201

NOWHERE TO HIDE

British airport operator BAA said yesterday it would move quickly to install full-bodyscanners at Londons Heathrow airport after the failed Christmas Day attack on a US- bound plane. The scanners cost around 200,000 each, but some critics question their effec- tiveness. The security crackdown will also include additional pat down searches at thedeparture gate, passenger profiling, and tests for explosives. Picture: GETTY

Peter Norris took up the position asthe first non-executive chairman forVirgin Group on November 9 last year.The 54-year-old oversees the day-to-day management of the group, whoserevenue tops 6bn a year. He offersadvice to chief executive StephenMurphy and his team of executives. Heis Sir Richard Bransons closest confi-

dante, assessing the performance of

board members while the billionairespends an increasing amount of timeon his charitable projects.Prior to his appointment Norris wasCEO of merchant bank Quayle Munro.But it is his exposure to Barings Bankthat has attracted the attention of commentators. He began his careerthere and rose through the ranks tochief executive of the companysinvestment division, a position he helduntil the institution collapsed in 1995.Norris was played by StephenShepherd in the 1999 film RogueTrader, which dramatised the lastdays of the doomed merchant bank inthe aftermath of Nick Leesons827m losses speculating on futures

contracts.

PETER NORRIS

VIRGIN MONEY

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ACCOUNTANCY firms have warnedthat only a tiny proportion of the UK residents avoiding tax by squirrellingaway income to offshore accounts willhave come clean by the time the gov-ernments amnesty deadline passes atmidnight tonight.

HM Revenue & Customs hopes toraise 500m from the crackdown, withfines limited to 10 per cent for thoseowning up before the deadline, after

which liabilities are set to increasesteeply. Fines will rise to at least 30 percent of the tax owed and up to 100 per

cent, with criminal investigationsthreatened in some cases.

KRAFT Foods is preparing to raise its10bn hostile bid for Cadbury inorder to convince shareholders toaccept its takeover.

Investors in the British confec-tionary company have been holdingout for a higher offer, and Kraft now

wants an extension on the deadlinefor its current cash-and-shares bid.

The offer was due to expire tomor-row, but Kraft will ask the TakeoverPanel for more time to come up witha better proposal.

Shares in Cadbury closed at 797pat the end of December 61p higherthan Krafts current offer, leaving theUS food giant little choice but toincrease its bid if it wants to winshareholders round.

The US company has until 19 January to table an improved bid. After that, it can only make a higheroffer if a rival suitor comes forward.

One of those considering a poten-tial counter bid is Hershey, the

American chocolate maker, whichhas been working on an offer for sev-eral weeks. Nestl and Ferrero Groupof Italy are also mulling rival offers.

Key to all interested parties isCadburys latest trading information.

An update is due on 15 January.Cadbury chairman Roger Carr

denounced the existing Kraft offer asderisory and an attempt to stealthe company on the cheap. The

board has promised shareholders bet-ter growth prospects as a standalonecompany, saying a tie-up with Kraft

would condemn Cadbury to a lacklus-tre future.

But the board would come underpressure to open Cadburys books if a

bid of more than 800p a share wasput forward. Unless a rival bidderemerges, Kraft must win the supportof more than half of the shareholderregister by 2 February or walk away.

Kraft ready

to up its bidfor Cadbury

RUSSIA has halted oil supplies toBelarussian refineries after failing toagree terms for 2010, traders said yes-terday, threatening a repeat of a dis-pute which disrupted supplies toelsewhere in Europe three years ago.

Deliveries to Belarus refineries were halted after talks broke down onNew Years Eve. Transit flows to otherparts of Europe have not so far beenaffected, but Germany and Poland areclosely watching the stand-off aftersupplies to some of their majorrefineries were cut during a similar

row between Moscow and Minsk in January 2007.

Russia halts oflow to BelaruTax amnesty tonet low returns

BY RACHEL S TEVENSON

FOOD PRODUCERS

FINANCIAL SERVICES ENERGY

LOWER house prices and falling inter-est rates have made homes signifi-cantly more affordable for first-time

buyers in the past 12 months, accord-ing to the Halifax.

The average price paid by a first-time buyer in 2009 was affordable innearly 40 per cent of local authority districts, compared with 24 per centin 2008 and just six per cent in 2007.

However the figures, revealed inthis years Halifax First-Time Buyer Annual Review, belie the fact thattighter lending criteria brought in by

banks since the financial crisis havemade it tougher for first-time buyersto obtain home loans.

Martin Ellis, housing economist atHalifax, added: Mortgage paymentsin relation to earnings are signif icant-ly below the average during the past25 years.

Fall in house priceslets in new buyers

PROPERTY

Kraft chief executive Irene Rosenfeldwants extra time toincrease the firmshostile bid for Cadbury.

Picture: REUTERS


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Over the two days, financial workers will be able to watch five teams of interna-tional sculptors chipping away at 2m x 2m

square blocks of ice to create stunningpieces of art, while those game for alaugh can try their own hand at theskill at one of the free supervisedmaster classes. Definitely one not to

be missed.

TAN TASTICCity types might think

theyve got a rough dealfrom the UK govern-ment after it introduced

a damning windfall taxon bank bonuses last

month, but spare a thoughtfor our poor US counterparts, who are struggling with an alto-gether uglier reality.

Before packing up for the holi-days, lawmakers in Washingtonpushed through a 10 per cent taxon indoor tanning services, toreplace its cosmetic surgery bo-tax (groan).

But the US government is now facing a backlash from the indus-try, which says it is grossly over-estimating tanning revenuesand the potential tax take fromthe new policy, not to mentionthe hordes of dedicated tanningfanatics intent upon keeping uptheir colour at all costs.

And Gordon Brown thoughthe had it bad trying to convince the City to suffer a bonus blow?

HELL ON HIGH WATEREveryones favourite daredevil chief execu-tive, Helical Bar boss Mike Slade, has beenup to his old tricks again over theChristmas period in his ICAP Leopardsuper-maxi racing yacht.

Slade, whos broken a whole haul of records with the yacht since launching iton the race circuit, was unable to take line

honours in the gruelling Rolex Sydney-Hobart race, finishing third after a painfultwo days, 16 hours and 45 minutes on thechoppy seas.

Not that its got his spirits down, mind.All that remains now is for us to paint thetown red and beat the locals at a spot of cricket before the flight home, he quips,in characteristically jovial style.

EX-LEHMANANALYSTS

SITE IS FULLOF HOT AIR

WHEELER dealers in the City may already be aware of the name Nicolas Dickreuter the former Lehman Brothers M&A analyst

who hit the headlines last year with apenny auction site, psychoauction.com,offering iPods, stereos and other expensivegoods for a fraction of the price.

Not content with his first stab at entre-preneurialism, Dickreuter is now makinga second comeback with his second busi-ness, psychobanker.com. And althoughthe new site seems at first glance to be aregular trading platform, theres a twist in that users are trading none other thanseemingly worthless commoditiessuch as hot air (yes, really) andgrains of sand.

Its a model of the City in minia-ture, enthuses Dickreuter. You getthe same rush when you make adeal, the same highs and lows,

but youre dealing with smallersums that belong to you.

All very novel, Im sure,though our mans ex-Lehmancolleagues arent overly impressed with his big ideas,

judging by a scathing blogpost on the banks onlinealumni forum. Quoting aDickreuter quip that if Ikeep on losing money, I may have to look for investors,one former co-worker dead-pans: If only he had beenintroduced to Dick Fuld intime

COLD AS ICEContinuing on its aggressivedrive for diverse culturalsupremacy, Canary Wharf hasdecided to treat its army of suits to yet another arty extravaganza for the New

Year in the form of theannual London IceSculpting Festival, which

will take place on 15 and 16 January next to the ice rink in Canada Square Park.

Dickreuters site aimsto recreate the excite- ment of the trading

floor, despite the fact users trade worthlesscommodities

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The Capitalist8 CITYA.M. 4 JANUARY 2010EDITED BY

VICTORIA BATESGOT A STORY? [email protected]

Slades spirits werent dampened by days at sea

If only hehad beenintroduced to

Dick Fuld intime, dead-pans one of Dickreutersformercolleagues

BILL OF THE WEEK

GONE are the decadent days of celebrating in the New Year with end-less bottles of Cristal at the Dorchester: this year, it was off for a goodold Spanish fiesta at Featherstone Streets Pinchito tapas bar instead.Our generous hosts took over the bar for a private party with friends,eating, drinking and dancing their way into the new decade.

They ordered numerous plates of the restaurants specially-createdMadrid menu including calamari, cured ham, manchego cheese,pork belly, chorizo, steak and garlic prawns along with generoussharing dishes of paella and churros con chocolate.

The mountains of grub were washed down with Mahou beer, Finosour cocktails, Cava, sangria and Rioja wines bringing the bill to atidy 3894.75. A very happy new year it must have been, too.

8/14/2019 CityAM 04/01/2010

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OLEG DERIPASKARusal aliminium firm owner

RUSSIAN aluminium firm Rusal,owned by billionaire Oleg Deripaska,is planning a $2.6bn (1.6bn) flota-tion this month, tipped to earn mil-lions for merchant bank NMRothschild, it emerged yesterday.

Rusal will sell 1.61 billion shares atup to HK$12.50 (1) a share to cut$14.9bn (9.2bn) of debt in a float setto value Rusal at up to $24.3bn(15bn).

Family-controlled Rothschild issaid to be poised to earn tens of mil-lions of pounds as adviser on the deal,

believed to be the first major flota-tion this year and the first by aRussian firm in Hong Kong.

Frances BNP Paribas andSwitzerlands Credit Suisse will spon-sor and co-ordinate the deal and willalso act as book-runners with Bank of

America Merrill Lynch, BOCInternational, Japanese bank Nomura, Renaissance Capital,Sberbank and VTB Capital.

The advisers are tipped to sharefees of between $60m and $80m,

based on typical commissions.Separately, Nat Rothschild, a close

friend of Deripaska and descendantof the banks founder Nathan MayerRothschild, is said to be planning toinject $100m (61.8m) into Rusal asone of four cornerstone investors inthe flotation.

More than five global investmentfunds, including BlackRock and anunnamed Chinese fund are under-stood to have provisionally agreed totake part in the IPO.

Rusal is the flagship of Deripaskas business empire and helped its major-ity owner to top Russias rich list

before the economic crisis slashed thealuminum from its Siberian smelters.

The planned valuation is set tomake Rusal the worlds most expen-sive aluminum firm, against rival

Alcoas $15.6bn market capitalisation.Rusal is believed to be planning a

road-show on January 11 with pricingexpected on January 21.

After the placement, DeripaskasEN+ will have 47.6 per cent of Rusalshares; Onexim Group of tycoonMikhail Prokhorov will hold 17.1 per-cent; SUAL Partners, controlled by tycoons Viktor Vekselberg and LenBlavatnik, will have 15.9 per cent; andSwiss-based commodities traderGlencore will hold 8.65 per cent.

Rusal float set

to earn millionsfor Rothschild

THE United States and Britain closedtheir embassies in Yemen yesterday over security concerns about possiblemilitant attacks after the failed

bombing of a US-bound plane onChristmas Day.

The US embassy cited threats by alQaeda, which US intelligence agen-cies believe has a growing presence in

Yemen. A British Foreign Office spokes- woman cited security reasons for herembassys closure but declined to say if a specific threat had been made.

British Prime Minister GordonBrowns office said Britain and the UShad agreed to intensify their joint

work to tackle the emerging terror-ist threat from both Yemen andSomalia in the wake of the failedplane attack.

UK and US shut uembassies in Yem

BY P HILIP W ALLERINDUSTRIALS

BY H ARRY B ANKSWORLD POLITICS

News 9CITYA.M. 4 JANUARY 2010

NAT ROTHSCHILDAtticus Capital hedge fund co-chairman

FIRMS across England and Walesare facing the prospect of dramatictax hikes in April after changes toGovernment business rates.

County cricket grounds, lifeboatstations, petrol filling stations, foot-

ball stadia, coaching inns, golf driv-ing ranges and zoos and safari parks

will be among the hardest hit. Pubs,shops and restaurants will also seeincreases, while most workshopsand factories will see lower bills.

The revaluations are carried outevery five years, but critics say the

2010 revaluation is unfair because itis based on property values andtrading conditions in April 2008,

which were better than they arenow.

Bills are calculated by multiplying businesss rateable value against thenational business rate expected to

be 41.4 pence in England this year. The Government is introducing

transitional relief which limitsthe maximum increase a businessmust pay in 2010 to 12.5 per cent.But bills are set to rise by up to 17.5

per cent in 2011, and up to 25 percent in 2012, 2013 and 2014.

Rate revaluation spellstax hikes for businessesUK ECONOMICS

8/14/2019 CityAM 04/01/2010

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POLICYMAKERS are this week expectedto err on the side of caution at themonthly meeting of the Bank of Englands Monetary Policy Committee(MPC), after they warned last monththat it would be impossible to identify

with confidence the turning point inthe economic cycle.

The MPC, led by Bank governorMervyn King, is expected to holdinterest rates at the record low of 0.5per cent for the eleventh month in arow at its decision on Thursday. It isalso likely to vote to maintain thequantitative easing (QE) asset pur-chase programme at 200bn.

Howard Archer, chief UK andEuropean economist at IHS GlobalInsight, expects the MPC to remainreluctant to further extend QE and tokeep interest rates down until at leastlate this year.

Furthermore, the eventual

increases in interest rates are likely to be limited to counter the restrictiveimpact of the tight fiscal policy that

will increasingly have to be enactedfrom 2011/12 to rein in the bloatedpublic finances, he said.

Minutes from the MPCs Decembermeeting, at which both elements of monetary policy were left unchangedfollowing a 25bn extension to QE inNovember, showed the committee

was keen to hedge its bets to combatongoing exceptional uncertaintiesover the outlook for inflation andactivity growth.

Though the MPC expects a short-term spike in the inflation rate, it pre-dicts price growth will ease later in2010 and will remain muted due tosubstantial spare capacity in the econ-omy. The Bank has also expressed con-cern at the ongoing reluctance of

banks to lend to the private sector,the willingness of households toincrease savings and uncertaintiesover employment.

MPC to holdrates and QEBY V ICTORIA B ATES

ECONOMICS

THE Japanese government hasagreed to double the offer of state-funded credit to Japan Airlines (JAL)to 200bn yen (1.3bn), it emerged yes-terday.

A state-run bank offered JAL aid of 100bn yen in November, and hasalready paid out more than half of that. Shares in JAL, which made aloss in four of the past five years, fellto record lows last week as specula-tion mounted it would file for bank-ruptcy.

Like many airlines, JAL has been hithard in the global economic down-turn.

The extra funding was agreed by Deputy Prime Minister Naoto Kan,

Transport Minister Seiji Maehara and

other ministers at a meeting yesterday.The government has decided to

expand from 100bn yen to 200bn yenthe line of credit from theDevelopment Bank of Japan to Japan

Airlines, an official statement said. The announcement was made

before trading resumes on the TokyoStock Exchange today.

JAL President Haruka Nishimatsu isagainst allowing the airline to go into

bankruptcy, suggesting tough negoti-ations ahead between the airline andthe government, the Asahi newspa-per reported.

The image (of bankruptcy) wouldaffect us and we would lose cus-tomers, Nishimatsu was quoted assaying. If we lose recognition fromcustomers, restructuring would bedifficult and this will trouble theETIC (a state-backed fund) too.

BY H ARRY B ANKSAVIATION

Japan Airlines gestate loan double

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FTSE 100+22%

FTSE 100down 21%

S&P 500+23.5%

S&P 500down 24%

DAX(Germany) +23%

CAC(France) +22%

NIKKEI

+19%

NIKKEIdown 19%

Hang Seng+52%

Gains inemerging nations 2009

Gains inmature bourses 2009

Mature boursesPast decade

Emerging nationsPast decade

Indias SENSEX+ 81%

Brazil and Russiaalso posting stellar

efforts

Shanghai+79%

Brazil+380%

Shanghai

+103%

India+239%

Russia+371%

South Africa+190%

S o u r c e :

B G C

NEWS | IN BRIEF

Ita eyes RBS and Lloyds sharesBrazilian giant Ita Unibanco is eyeing astake in one of Britains taxpayer-backedbanks, it was reported yesterday. Ita,the tenth largest deposit taker in theworld and the largest bank in Brazil, isthought to be examining the possibility of buying shares in Royal Bank of Scotlandand Lloyds Banking Group as they aresold off by the UK government. It is alsolooking to expand in the US. PedroMalan, chairman of Itas internationaladvisory board, said: Were looking. Of course were looking. He added: Butwere not in a hurry. We think we havetime. The UK taxpayer owns 84 per centof RBS and 43 per cent of Lloyds.

Fares rise on tube and busesTube and bus fares have risen this monthby above-inflation rates. Average tube

fares have gone up by 3.9 per cent andbus fares by 12.7 per cent.

Commuters using Oyster cards also facea rise of 20p per journey on both busesand the tube.Passengers using suburban overland railservices could get cheaper fares, asOyster cards have come into force onmainline train routes.

Avatar earns $1bn at box officeThe sci-fi film Avatar sped past the $1bn(618m) mark at the worldwide boxoffice after three weekends in release,making it the fourth-biggest movie of alltime, according to data released yester-day. James Camerons 3-D epic earned$1.02 bn, powered by sales of $202mduring the New Year holiday weekend,distributor 20th Century Fox said. Theonly movies ahead of it are CameronsTitanic ($1.8 bn), The Lord of theRings: The Return of the King ($1.12 bn),

and Pirates of the Caribbean: DeadMan's Chest ($1.07 bn).

SWEET RETURNS

Equity returns in the worlds more mature stock markets have been far outstripped by those on emerging nations markets, according to figures published yesterday by David Buick at BGC Partners. Buick says the main index in Brazil grew 380 per cent over the decade,compared to a miserable fall of 21 per cent from the FTSE.

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News 11CITYA.M.4 JANUARY 2010

BRITISH savers could lose millions of pounds if the Icelandic governmentscraps plans to repay funds lost whenthe islands banks collapsed.

Nearly a quarter of Icelands320,000 population have signed apetition calling on President Olaf Ragnar Grimsson to call a referen-dum over the repayment of 3.1bn.Polls suggest 70 per cent of Icelanders are against repayment toUK and Dutch investors.

Icelandic banks offered some of the most attractive deposit interestrates in the world, at the expense of healthy margins.

They convinced 300,000 UK saversto invest billions.

At the point of collapse in October2008 the Icelandic banking systemowed investors more than 160bn seven times the countrys GDP.

The UK government used anti-ter-ror legislation to seize Icelandicassets and 2.3bn in loans were sanc-tioned to repay individuals who hadlost money.

But public bodies including policeforces, charities and local councils

were not protected. The governmentagreed to pay the money back aftermonths of tortuous negotiations

but the bill has not yet been signedinto law by the President.

Icelanders are furious that they will be repaying the loan for at least15 years but failure to do so coulddash the countrys hopes of joiningthe European Union.

Meanwhile the Financial Services Authority (FSA) has been accused of failing to stop the weak Icelandic

bank Kaupthing from setting up UK retail operations because they thought accepting personal deposits

would help the banks liquidity.It is now believed the FSA had

concerns about the collapsed bank as early as December 2007.Kaupthings assets were amongthose frozen to prevent them beingtransferred back to Iceland. TheSerious Fraud Office is now investi-gating the bank.

An FSA spokesman said: TheIcelandic parliamentary stuff is notsomething we would comment on.

LONDONs junior stock market saw the flood gates reopen in the finalquarter of last year as the number of companies delisting rose almost 16per cent, new research from law firm

Trowers & Hamlins and accountancy firm UHY Hacker Young has shown.

The unexpected jump in firmsleaving the Aim market up to 73companies in the final three months

of 2009 compared to 63 in the thirdquarter comes after a gradual fall

in the number of delistings through-out the first three quarters of the

year.However, the research also shows

the primary reason for delistings isnow takeover activity, which caused23 exits in the fourth quarter of 2009.

Twenty-two companies had todelist during the quarter because of insolvency or financial stress downfrom 27 in the third quarter of 2009

but still over double the nine firmsquitting the market a year earlier.

Charles Wilson, a partner at Trowers & Hamlins, said the increase

in delistings was not wholly badnews for Aim because of the increasein takeover activity. Some of themore recent takeovers of Aim compa-nies have been launched by manage-ment or by majority shareholders[and] it is a positive sign when insid-ers are willing to initiate takeovers of

Aim companies they are involved in,he said.

But Laurence Sacker, a partner atUHY Hacker Young, cautioned thatthe market is not out of the woods

yet, adding: There are still a lot of walking wounded out there.

M&A activity prompts further flurry of delistings from Londons Aim market

Iceland keento scrap UKpayment dealBY S TEVE D INNEEN

BANKING

BY V ICTORIA B ATES

FINANCIAL SERVICES

It will be another volatile year for the ma

Making predictions about the year ahead isan exercise that more often that notresults in the author ending up lookingpretty foolish. The last few years have

proved that even some of the best minds on theplanet have a pretty poor record in plotting thefuture.

On the other hand, this does mean that meremortals such as myself have as much chance of getting it right as anyone else. So here goes....

China will keep on growing at eight per cent or better. Beijing will continue to do whatever it can

to stimulate the economy and will in the processfurther inflate the countrys property bubble. This wont burst until 2012, the year Shanghaiunveils the worlds new tallest building eclipsingDubais Burj tower, which opens today.

US stocks will outperform emerging marketscatching out many fund managers in the process.

The Shenzhen index has certainly delivered this year but as America returns to growth its now highly efficient companys will produce stellarprofits.

The Bank of England will leave rates on holdfor the whole of 2010. This as a new Tory govern-ment slashes spending and savages the public

sector cost base. Despite sterling offering little inthe way of yield, the pound will surge as investorsapplaud Londons determination to fix the coun-trys balance sheet.

The eurozone will suffer a crisis of confidence

as Greece teeters on the edge of a debt default.However, rather than riding to the rescue, Berlinforces Athens into the arms of the IMF. As aresult, like the Bank of England, the ECB willhave little choice but to keep borrowing costs atultra low levels but unlike the pound the euro

will weaken sharply.Geopolitics will be a bigger part of the risk

equation in 2010 as Iran undergoes a bloody regime change. As a worried world watchesevents unfold the price of oil will briefly spike

back above $150 but will quickly fall back toaround $80 as the situation in Iran stabilises.

The year ahead is likely to be a bumpy one.

Indeed, the only thing that investors can bet on isthat 2010 will prove to be another extremely

volatile year.Guy Johnson co-anchors European Closing Bell and

Europe Tonight, weekdays on CNBC

NEWS | IN BRIEF

US to see only gradual recoveryThe US economy and job market willrebound only gradually because of ongo-ing constraints on lending, FederalReserve vice chairman Donald Kohn saidyesterday. This means inflation willremain contained for some time, he saidin prepared remarks to the annual meet-ing of the American EconomicAssociation, adding: "Lingering creditconstraints are a key reason why Iexpect the strengthening in economicactivity to be gradual and the drop inthe unemployment rate to be slow.

Cash calls boost LSE fundraisinThe London Stock Exchange enjoyed arecord year for equity fundraising in2009, boosted by an unprecedented vol-ume of rights issues from firms shoringup their balance sheets in the recession.82.5bn was raised on the exchangeover the year, up 16 per cent on 2008thanks to the likes of Lloyds BankingGroups record-breaking 13.5bn rightsissue in November and cash calls fromHSBC, miner Rio Tinto and housebuilderBarratt Developments. But of the total,

just 1.65bn was raised at IPO, a merewhisper compared to the amounts raisedby firms floating in previous years.

Pay cheer for public sectorPublic sector workers earn seven percent on average more than their coun-terparts in the private sector, accordingto Office for National Statistics data.The figures show that average publicsector earnings rose to 22,405 lastyear, compared to 20,988 in the pri-vate sector. The data shows that publicsector wages are rising at 2.8 per cent,compared with 1.1 per cent in the pri-vate sector. The number of public sectorworkers has increased by nearly a mil-lion since Labour came to power.

CNBC COMMENT

GUY JOHNSON

BEST OF THE BROKERSANALYSIS l Infineon

3.00

3.20

3.40

3.60

3.80

4.00

19 Oct 9 Nov 30 Nov 21 Dec

3.8831 Dec

INFINEONStandard & Poors maintained its sell rec-ommendation ahead of Infineons fiscal Q1results. It believes the trading price for thesemiconductors and system solutionsprovider is too high given the short-termrisks and longer-term challenges facing thecompany. It is especially worried about theexposure to the slowing automotive indus-try and the risk of market share losses inwireless technology.

ANALYSIS l RSM Tenon Group

45

50

55

60


p

48.7531 Dec

RMS TENON GROUPAltium Securities has retained its buyrecommendation for the financial servicesfirm. It believes there is scope for long-term earnings after Tenon gained share-holder approval for the RSM BentleyJennison acquisition last week. Altiumtrimmed its 2010 expectations by 2.5 percent but increased forecasts for 2012 by

seven per cent, giving the group credit forlimited cost savings and revenue synergies.

ANALYSIS l Atos Origin

28

30

32

34

36

38


32.0931 Dec

ATOS ORIGINStandard & Poors reiterated its sell rec-ommendation for IT services companyAtos Origin. S&P increased its 2010 earn-ings forecast by 8 per cent after factoringin greater scope to cut subcontractingcosts but still maintain traders shouldoffload shares. S&P say the shares are val-ued too highly compared to peers andshould trade at a greater discount given aweaker business franchise.

To appear in Best of the Brokers email your research [email protected]

0

5

10

15

20

25

ANALYSIS l Why the flood of Aim delistings continues apace

n u m

b e r o f c o m p a n i e s

d e l i s t i n g

Reasons for delisting

A i m

t o o e x p e n s i v e /

t o o m u c

h o f a

b u r d e n

C h a n g e o f

l i s t i n g t o

o t h e r e x c h a n g e

F a i l u r e o f s t r a t e g y

F i n a n c i a l s t r e s s a n

d i n s o

l v e n c y

M & A

N o N o m a d

O t h e r

Q4 2008

Q4 2009

Total

73

71

8/14/2019 CityAM 04/01/2010

14/24

SHARES of firms in the troubled Gulf state of Dubai began 2010 on a high

yesterday ahead of todays opening of the worlds tallest building.

The emirates stock index closed atits highest level for two weeks asinvestors predicted the officiallaunch of the Burj Dubai will liftearnings at developer EmaarProperties.

Emaars stock rose 7.8 per cent toits highest since November whilecounterparts like Burj contractor

Arabtec and Deyaar lifted 6.3 per centand 6.9 per cent respectively.

Dubais DFM General Indexincreased 3.4 per cent to 1,866 on thefirst trading day of the year.

Dubai shares struggled last yearamid a credit shortage, lower proper-ty prices and fears that state-ownedholding firms including Dubai Worldmight fail to service debts.

Analysts forecast healthy first quar-ter results at Emaar and said thetowers opening was boostinginvestor sentiment.

Prime Emirates head of salesShawkat Raslan said: Big volumes inEmaar and Arabtec mean the marketshould be able to go a bit higher.

Dubai shook global markets inNovember when it said it wanted astandstill on billion-dollar debtslinked to Dubai World and its proper-ty units Limitless and Nakheel.

A $10bn (6.2bn) lifeline from Abu Dhabi helped Dubai to avoiddefaulting on a $4.1bn bond fromNakheel and provided funds to serv-ice debts. The first occupants of thetower, which has more than 160floors, are set to move in duringFebruary.

Dubai sharessent upwardsby skyscraperBY PHILIP WALLER

PROPERTY


London must not be sacrificed in age of au

As was recently reported, I amtaking a hands-on approach tothe Mayoralty from bastingthe family Christmas Turkey

down in the kitchens of MansionHouse to defending the Citys inter-ests against Nicholas Sarkozys plans

for European domination, I am notafraid to get my hands dirty!

That is why, if I were to make oneNew Years resolution other than

beating the nine Red Arrows pilots

who will be running this yearsLondon Marathon with me it would be to ensure that the City receives allthe support it needs in order to retainits status as a world class centre for

business, culture and education andthat our 8,000 residents can continueto live in an environment that isclean, safe and well-serviced.

I am kicking off 2010 by welcoming The Mayor of London, Boris Johnsonand Merrick Cockell, Leader of London Councils to Mansion Housefor the annual London Government

Dinner.London is home to 12 per cent of

Britains population and yet it con-tributes 20 per cent of economic out-put whilst also raising a tax surplus of

more than 15 billion which is thenspent across the rest of the UK. WhenLondon succeeds, so too does the restof the country..

This years dinner will doubtless bedominated by a single theme how to guarantee our future prosperity inthe face of difficult economic circum-stances, a massively depleted publicpurse and, perhaps most importantly,

with a General Election looming justover the horizon.

2010/11 is going to be a very toughfinancial year for Londons councils,

with some estimates pointing to realcuts, outside education, of 15 per centover four years.

I know that borough leaders acrossLondon, as well as my colleagues at

Guildhall, are working hard toincrease efficiency and to deliver serv-ices in a way that keeps a lid onexpenditure but does not reducequality.

In return, it is vital that our nextgovernment, whichever colour it may

be, continues to invest in large infra-structure projects that will safeguardLondons future, particularly withregards to transport.

The situation is simple, London des-perately needs Crossrail.

Londons tube network also needs

to continue with its programme of renewal.

To sacrifice our long-term prosperi-ty for short-term gain would be unfor-givable and throughout my time in

office I shall continue to vociferously argue the case for these essentialupgrades.

There is no doubt that these are dif-ficult times but as a long time City resident my three daughters were

born, raised and schooled here I want to be able to look back on my year in office with a real sense of achievement, safe in the knowledgethat the City of London will continueto thrive in the years to come.

Nick Anstee is Lord Mayor of the City of London.

NEWS | IN BRIEF

Ski breaks hit by the recessionAlmost 20 per cent of UK consumersintend to sacrifice their annual wintersun or ski break this year to combat thefinancial pressures of the recession,research from accountancy firmPricewaterhouseCoopers has shown.But consumers will balance their winterthriftiness with a travel spending spreein the summer, with a mid-year holidayremaining second only to repaying debton credit cards, loans and overdrafts inthe spending priority stakes.

Glazers in refinancing talksThe Glazer family is reported to be con-sidering a bond issue with the aim of raising between 500m and 600m torefinance Manchester United FootballClub. The family has asked JPMorganChase & Co and Deutsche Bank to workon the plans, according to reports.

Threshers owes taxman 13.7mThe taxman is the biggest casualty sofar from the collapse of Threshers, theoff-licence chain, with First Quench, theholding company for the group, owing13.7m in unpaid alcohol duty.The figure comes from papers releasedby KPMG, the administrator. KPMG istrying to sell some of the off-licences inan effort to raise funds.

UK M&A plumbs depths in 200The number of mergers and acquisitionsinvolving UK target companies droppedby almost a quarter in 2009, the lowestM&A volume since 1994, according tobusiness advisory firm Grant Thornton.The number of announced deals fell to2,086, while the value of those deals fellby a third to 97.6bn. However, the firmshead of M&A David Brooks said thereare grounds to be cautiously optimisticabout mid-market M&A for 2010.

CITY COMMENT

NICK ANSTEE

City HallThe Mayor of London, Boris Johnson,has appointed Lizzie Noel as his newadviser on social action and volunteer-ing, effective from 11 January.

Noel, who is also currently a trusteeof the Arts Foundation, has extensivecommunications experience, havingpreviously worked for seven years asdirector of communications at publicservices specialist Tribal Group.

In her new role, she will be responsi-ble for boosting positive social actionacross the capital, encouraging employ-ees across the public and private sec-tors and the Greater London Authorityto give up their time to work with char-itable organisations.

Religare Hichens HarrisonThe investment banking business hashired Nikhil Bahel as a managing direc-tor based in London, responsible forcross-border M&A activities and thefirms telecoms, media and technology(TMT) offering for India.

Bahel joins from Goldman Sachs,where he co-created the banks Indianoperations and managed the TMT fran-chise. He has previously led deal teams

advising the likes of Vodafone on its$26.5bn infrastructure joint ventureIndus Towers and Infosys Technologieson its $1.6bn ADR offering.

Bahel has also formerly served as co-chairman of the Venture CapitalistAssociation of India and has co-authored a debt capital markets work-ing paper for the Indian government.

Grant ThorntonThe business advisory firm has appoint-ed Glenn Stone as the new head of infrastructure at its member firm in theUnited States.

Stone, who has been a projectfinance partner at the firm in the UKfor over a decade, is a specialist in sup-porting infrastructure projects. Based

in Washington DC, he will now focus ontransportation and high speed rail proj-ects to further the US green agenda.

Security Global InvestorsThe investment advisory firm has hiredJason Long as a senior research ana-lyst, specialising in the financial sector.

Most recently, Long worked as apartner at San Diego-based investmentadvisor Carmel Capital Partners.

CapitalSourceThe commercial lender has hired LairdBoulden as president of corporate assetfinance, effective from the beginning of February.

Boulden was formerly president of Tygris Asset Finance.

CITY MOVES |WHOS SWITCHING JOBS Edited by Victoria Bate

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Calunius CapitalThe litigation funding advisory firm hasappointed Christian Stuerwald as head of caseassessment, preceding the first close of theCalunius Fund, which will invest in the costs of large-scale commercial litigation.

Stuerwald, one of the most experienced liti-gation risk assessors in Europe, joins fromAllianz Litigation Funding, where he hasworked for five years and is currently head of UK litigation funding.

The opening of the Burj Dubai has rekindled optimism in the emirate Picture: GETTY

ANALYSIS l DFM General Index

1.780

1.800

1.820

1.840

1.860

1.880

10: 00 11:00 12: 00 13:00 14: 00

D 1.86631 Dec

8/14/2019 CityAM 04/01/2010

15/24

13Markets&Investment

ASIAN MARKETS

UK and European markets start year in th

UK and European stock marketsare set to start the year in thered, after ending 2009 close totheir highs of the year.

GFT is quoting the FTSE 100 indexto open down as much as 39 pointsfrom Fridays close, at a level of 5,373.

The German DAX is also expected tostart lower, down 11 points at 5,946,and the French CAC is forecast toopen down 20 points at 3,916.

INVESTORS WARY OF STOCKS After such a bumper year it is some- what inevitable that we may see a cer-tain degree of mounting trepidationfrom investors wary of stock markets

which many predict are on the verge

of a correction, with forecasts of any- where from a 10 to 30 per cent sell-off now widespread. It is with thatprospect in the back of traders mindsthat sets us up for a negative start thismorning. The non-farm payrolllsnumber is out from the States onFriday, and the markets subsequentreactions thereto may well give a

good indication for what we canexpect in the coming months as themarket prices in ever-growing expec-tations of impending interest raterises in the US. Closer to home, salesupdates from Marks and Spencer andNext could well surprise to the upsideafter shoppers seemingly hit the HighStreet in their droves over the holiday period, although the cheer may betempered by the possibility that theseare one-off beat-the-VAT-rise inflat-ed numbers.

Martin Slaney, Director, Global Dealing

Operations, GFT

MARTIN ONTHE MARKETS

J apan's Nikkei stock averagegained 0.8 percent in the firsttrading session of 2010 thismorning, with exporters such as

Honda up on a weaker yen after US jobless claims data strengthenedhopes for a steady economic recovery.

The Tokyo Stock Exchange

appeared to have a smooth start to its$145m (90m) new Arrowhead trad-

ing system, as Asia's biggest boursetargets a dramatic increase in speedto revive its business and reputation.

Consumer lender Aiful opened up0.8 percent after the InternationalSwaps and Derivatives Association

voted in favour of an auction to settlesome $1.3bn in credit derivatives con-tracts on Aiful.

Japan Airlines was untraded andoverwhelmed with buy orders after

media reported that the state-ownedDevelopment Bank of Japan woulddouble its credit line for the strug-gling airline to 200bn yen (1.3bn).

The benchmark Nikkei gained84.44 points to 10,630.88, while the

broader Topix rose 0.8 percent to914.51 in early trading. Meanwhile,the Australian share market ticked up

slightly, with the S&P/ASX200 driven by industrials to rise 0.3 per cent.

MARTIN SLANEY

LONDONS TOP 250 Trade these shares from 1.50 with Interactive Investo3i . . . . . . . . . . . . . . . . . . . . . . . . 2 83 .0 0* + 2. 70 3 14 .8 0 1 08 .6 63i Infrastructure. . . . . . . . . . . . .101.60 0.20 105.80 76.50A.B. Foods. . . . . . . . . . . . . . . . .822.00* +1.00 870.50 603.00

Aberdeen Asset Man. .. . . . . .. .134.00* 0.90 155.60 106.50

Admiral. . . . . . . . . . . . . . . . . . .1189.00 +14.00 1189.00 793.50Aegis. . . . . . . . . . . . . . . . . . . . . 11 9. 40 + 2. 30 1 22 .9 0 6 6. 75Aggreko. . . . . . . . . . . . . . . . . . .930.00 +1.00 934.50 342.00Alliance Trust. . . . . . . . . . . . . . .328.30* +0.30 329.70 233.00AMEC. . . . . . . . . . . . . . . . . . . . . 79 2. 00 * + 7. 50 8 7 9. 50 4 73 .2 5Amlin. . . . . . . . . . . . . . . . . . . . . 35 8. 70 2. 80 4 00 .0 0 2 91 .0 0Anglo American. . . . .. . . . . .. 2711.00 +15.50 2766.00 906.00Antofagasta. . . . . . . . . . . . . . . .992.00 +17.50 1003.00 371.00Aquarius Platinum. . .. . . . . .. .407.00 +5.10 416.90 128.85ARM Holdings. . . . . . . . . . . . . . .177.50 0.90 180.50 77.50Arriva. . . . . . . . . . . . . . . . . . . . . 49 7. 10 5. 90 6 41 .0 0 3 61 .0 0Ashmore. . . . . . . . . . . . . . . . . . .272.00 +7.00 311.20 92.75Astrazeneca. . . . . . . . . . . . . . .2910.50 +3.50 2966.00 2126.00Atkins(Ws). . . . . . . . . . . . . . . . .611.00* 7.50 747.50 415.00Autonomy Corp. . . . . . . . . . . .1511.00 1687.00 924.00Aveva. . . . . . . . . . . . . . . . . . . .1007.00 +4.00 1083.00 460.00Aviva. . . . . . . . . . . . . . . . . . . . . 39 7. 90 + 3. 50 4 74 .0 0 1 60 .1 0Babcock International.. . . . . .. .596.00* 0.50 660.50 381.25BAE Systems. . . . . . . . . . . . . . .359.50 +0.50 416.00 294.20Balfour Beatty. . . . . . . . . . . . . . .258.50 +0.30 346.18 243.40Barclays. . . . . . . . . . . . . . . . . . . 27 6. 00 +3 .7 5 3 90 .0 0 4 7. 30Barratt Development. .. . . . . .. .124.00 +3.00 193.31 40.82BBA Aviation. . . . . . . . . . . . . . .164.00 +0.10 184.20 58.25Bellway. . . . . . . . . . . . . . . . . . . .818.00* +48.00 927.50 515.00Berkeley. . . . . . . . . . . . . . . . . . .820.00 13.50 1071.00 716.50BG. . . . . . . . . . . . . . . . . . . . . . 1122.00 0.50 1180.00 836.50BHP Billiton. . . . . . . . . . . . . . .1995.00 +0.50 2024.50 1025.00BlackRock Mining. . . .. . . . . .. .550.00 +3.50 565.00 233.00BlueBay. . . . . . . . . . . . . . . . . . . 30 5. 00 8 .1 0 3 93 .0 0 6 3. 00Booker . . . . . . . . . . . . . . . . . . . . . 46 .0 0 1. 00 4 9. 50 2 0. 50Bovis Homes. . . . . . . . . . . . . . .434.70 +22.80 571.00 341.75

BP. . . . . . . . . . . . . . . . . . . . . . . 60 0. 00 1 .4 0 6 13 .4 0 40 0. 00Brit Insurance. . . . . . . . . . . . . . .197.10 0.30 199.40 185.20British Airways. . . . . . . . . . . . . .186.90 0.40 243.30 111.30British Amer. Tob. . . .. . . . . ..2016.50 5.00 2055.50 1481.00British Empire Tst. . . .. . . . . .. .416.60* +0.60 451.80 304.00British Land. . . . . . . . . . . . . . . .480.00 +15.10 535.26 295.00Britvic. . . . . . . . . . . . . . . . . . . . . 40 8. 00 * + 3. 10 4 0 8. 00 2 04 .2 5Brown(N.). . . . . . . . . . . . . . . . . .248.00* 3.80 275.80 183.75BSkyB. . . . . . . . . . . . . . . . . . . .562.00 0.50 593.00 398.25BT. . . . . . . . . . . . . . . . . . . . . . . 13 5. 00 * 2. 20 15 1. 00 7 0. 20Bunzl. . . . . . . . . . . . . . . . . . . . . 67 5. 00 * + 7. 00 6 7 9. 50 4 73 .0 0Burberry. . . . . . . . . . . . . . . . . . .599.00 +8.00 617.00 194.25Cable & Wireless . . . . . . . . . . . . .141.40* +0.10 170.00 125.10Cadbury. . . . . . . . . . . . . . . . . . .797.50 +2.50 819.50 484.25Cairn Energy. . . . . . . . . . . . . . . .332.60 +1.50 358.90 319.50Caledonia Invs.. . . . .. . . . . ..1598.00* +8.00 1759.00 1081.00Capita. . . . . . . . . . . . . . . . . . . . . 75 1. 00 + 8. 50 7 91 .0 0 6 08 .0 0Carillion. . . . . . . . . . . . . . . . . . .303.80 0.70 319.60 192.00Carnival. . . . . . . . . . . . . . . . . .2135.00 7.00 2218.00 1224.00Carpetright. . . . . . . . . . . . . . . . .942.00 7.00 970.00 346.00Carphone Warehouse.. . . . . .. .187.80* +2.20 216.10 88.25Catlin. . . . . . . . . . . . . . . . . . . . . 34 0. 00 + 3. 00 4 01 .7 9 2 70 .0 0Centrica. . . . . . . . . . . . . . . . . . .281.10 0.80 288.75 212.50Charter Intl. . . . . . . . . . . . . . . . .722.00 3.50 778.50 305.75Chemring. . . . . . . . . . . . . . . . .2937.00 +27.00 2953.00 1794.00Close Bros. . . . . . . . . . . . . . . . . 69 0. 00 8 06 .5 0 3 84 .2 5Cobham. . . . . . . . . . . . . . . . . . .251.50 +0.50 253.40 163.90COLT Telecom. . . . . . . . . . . . . .132.50 1.30 138.50 65.00Compass. . . . . . . . . . . . . . . . . .445.20 7.00 470.10 275.00Cookson. . . . . . . . . . . . . . . . . . .422.20 +2.10 481.40 202.75

Company Name Closing Price Price Change 52wk High 52wk low(p) (p) (p) (p)

Croda Intl. . . . . . . . . . . . . . . . . .800.00 +7.00 812.00 451.50CSR. . . . . . . . . . . . . . . . . . . . . . 4 09 .1 0 + 1. 70 5 24 .0 0 1 52 .0 0Daily Mail A. . . . . . . . . . . . . . . .418.20* +3.90 467.30 205.75

Dana Petroleum. .. . . . . .. . . .1176.00 13.00 1549.00 807.00

Davis Service. . . . . . . . . . . . . . .399.60 7.10 438.00 213.75De La Rue. . . . . . . . . . . . . . . . . .988.00* 2.00 1080.00 808.50Debenhams. . . . . . . . . . . . . . . . . 77 .9 0 9 9. 50 2 4. 00Derwent London. .. . . . . .. . . .1320.00 +31.00 1418.00 445.50Dexion Absolute. . . . . . . . . . . . .140.00 +0.50 140.30 82.00Diageo. . . . . . . . . . . . . . . . . . . 10 84 .0 0 1 09 8. 00 72 7. 00Dimension Data. . . . . . . . . . . . . .74 .80 +0.10 82.80 32.75Drax. . . . . . . . . . . . . . . . . . . . . . 4 14 .8 0 0 .1 0 64 4. 50 3 9 3. 75DSG Intl. . . . . . . . . . . . . . . . . . . . 3 6. 50 0. 51 3 9. 75 1 2. 36Dunelm. . . . . . . . . . . . . . . . . . . .380.00 31.00 438.40 121.50Easyjet. . . . . . . . . . . . . . . . . . . .353.00 1.40 416.80 246.50Edinburgh Inv Tst.. . . . . .. . . . .370.60 1.40 375.90 283.75Electrocomponents.. . . . .. . . . .161.70* 2.30 176.00 113.00Eurasian Nat Res.. . . . . .. . . . .915.00 +3.50 965.00 295.00Experian. . . . . . . . . . . . . . . . . . .615.00* +2.00 639.00 371.75F&C Comm Prop. . . . . . . . . . . . . .90 .00 +1.00 90.00 73.50Ferrexpo. . . . . . . . . . . . . . . . . . .198.50 +3.60 228.40 30.00Fidelity European.. . . . . .. . . .1151.00 +11.00 1182.00 753.00FirstGroup. . . . . . . . . . . . . . . . .426.00 +9.30 448.80 192.90Foreign & Col Inv Tst . . . . .. . . . .272.10 0.80 275.40 179.25Fresnillo. . . . . . . . . . . . . . . . . . .792.00 +14.00 935.00 217.75G4S. . . . . . . . . . . . . . . . . . . . . . 2 60 .6 0 + 0. 70 2 65 .8 0 1 71 .9 0Genesis Emerging Mkts Fd. . . . .438.00 440.00 370.00GKN. . . . . . . . . . . . . . . . . . . . . . 117 .0 0 + 0. 30 1 31 .3 0 3 6. 45GlaxoSmithKline. .. . . . . .. . . .1319.50* 1.50 1347.00 982.00Go-Ahead. . . . . . . . . . . . . . . . .1334.00 +12.00 1577.00 845.00Great Portland Estates. . .. . . . .287.10* 5.50 300.00 127.11Greene King. . . . . . . . . . . . . . . .408.00* +3.50 547.45 279.35Halfords. . . . . . . . . . . . . . . . . . .399.30* 0.80 442.10 216.75Halma. . . . . . . . . . . . . . . . . . . . . 24 3. 00 5. 20 2 56 .0 0 1 40 .7 5Hammerson. . . . . . . . . . . . . . . .424.00 +16.20 624.50 212.25

Hargreaves Lansdown. . .. . . . .294.90 +0.90 299.90 158.50Hays. . . . . . . . . . . . . . . . . . . . . . 1 04 .1 0 + 0. 90 11 4. 00 6 7. 25Henderson. . . . . . . . . . . . . . . . .124.30 1.10 142.10 50.00Heritage Oil. . . . . . . . . . . . . . . . .436.00 4.00 630.00 161.00Hikma Pharma. . . . . . . . . . . . . .510.00 6.00 525.00 308.50Hiscox. . . . . . . . . . . . . . . . . . . .317.00 +0.10 364.30 272.50Hochschild Mining. . . . . .. . . . .341.80 3.40 366.40 101.00Home Retail. . . . . . . . . . . . . . . .282.50* +0.70 336.50 180.40Homeserve. . . . . . . . . . . . . . . .1689.00* 12.00 1752.00 849.50HSBC Hldgs. . . . . . . . . . . . . . . .708.80* 1.70 766.80 270.37Hunting. . . . . . . . . . . . . . . . . . .582.50 6.00 596.00 367.00ICAP. . . . . . . . . . . . . . . . . . . . . . 4 30 .0 0 + 7. 40 4 78 .3 0 1 99 .2 0IG. . . . . . . . . . . . . . . . . . . . . . . . 3 79 .8 0 0. 60 38 5. 30 1 59 .2 5Imagination Tech Gp. . . . .. . . . .241.00 +5.00 250.00 55.50IMI. . . . . . . . . . . . . . . . . . . . . . . 51 8. 50 0 .5 0 5 52 .0 0 2 14 .0 0Imperial Tobacco. . . . . . . . . . . .1960.00 2.00 1988.00 1412.00Inchcape. . . . . . . . . . . . . . . . . . . . 2 9. 85 0. 15 36 .7 4 5 .8 2Informa. . . . . . . . . . . . . . . . . . . .320.00 +1.20 339.10 216.00Inmarsat. . . . . . . . . . . . . . . . . . .692.00 2.00 700.00 378.25Intercontl Hotels. . . . . . . . . . . . .893.00 2.50 926.50 433.75Intermediate Capital. . . . .. . . . .274.00 +1.10 332.00 79.71Intertek. . . . . . . . . . . . . . . . . . .1255.00 +9.00 1368.00 753.50Intl Power . . . . . . . . . . . . . . . . . .309.10 +0.30 311.00 190.60Invensys. . . . . . . . . . . . . . . . . . .299.30 +3.90 314.60 136.00Investec. . . . . . . . . . . . . . . . . . .425.10 2.60 487.20 164.75ITV. . . . . . . . . . . . . . . . . . . . . . . . 5 2. 35 1. 55 58 .6 5 1 6. 50Jardine Lloyd Thompson. . . . . . .483.60 +5.30 514.00 387.75Johnson Matthey.. . . . . .. . . .1531.00* +14.00 1641.00 856.50JPMorgan Emerg Mkts. . .. . . . .490.00 +0.50 490.00 265.00Kazakhmys. . . . . . . . . . . . . . . .1328.00 +13.00 1345.00 187.30

Company Name Closing Price Price Change 52wk High 52wk low(p) (p) (p) (p )

Kesa Electricals. . . . . . . . . . . . .149.20 1.40 162.00 83.50 . . . . . . . . . . . . . . . . . .229.00 +0.40 249.10 115.00

Ladbrokes. . . . . . . . . . . . . . . . .137.50 0.40 213.49 114.60

Lancashire Hldgs. . . .. . . . .. . .445.00* +2.00 540.00 411.00

Land Securities. . . . . . . . . . . . . .685.00* +28.00 1051.00 323.25Legal & General. . . . . . . . . . . . . .80 .60 +2.75 94.40 20.90Liberty International. .. . . . .. . .515.00 +14.00 580.00 278.00Lloyds Banking Gp. . . . . . . . . . . .50 .69 +0.85 96.02 21.97Logica. . . . . . . . . . . . . . . . . . . . 113 .7 0 0. 10 13 6. 80 5 9. 25London Stock Exchange. . . .. . .718.00* +9.00 949.50 355.75Lonmin. . . . . . . . . . . . . . . . . . .1959.00 +18.00 1967.00 729.97Man. . . . . . . . . . . . . . . . . . . . . . 3 08 .5 0 + 4. 30 3 73 .6 0 1 50 .4 0Marks & Spencer . . . . . . . . . . . . .402.00* +1.00 408.30 209.50Meggitt. . . . . . . . . . . . . . . . . . . .260.00 1.00 267.10 110.50Melrose. . . . . . . . . . . . . . . . . . . 18 0. 00 2 .9 0 1 98 .2 0 5 8. 25Mercantile IT. . . . . . . . . . . . . . . .863.00* +2.00 964.00 515.50Michael Page Intl . . . . . . . . . . . . .378.90 1.50 388.90 171.25Micro Focus. . . . . . . . . . . . . . . .455.70* 1.70 469.80 257.50Millen & Copthorne. . .. . . . .. . .370.70 +1.80 411.90 165.50Misys. . . . . . . . . . . . . . . . . . . . . 21 6. 00 2. 80 2 38 .8 0 9 6. 25Mitchells & Butlers. . .. . . . .. . .248.10 2.30 310.60 150.00MITIE. . . . . . . . . . . . . . . . . . . . . 22 9. 80 * + 0. 70 2 8 1. 70 1 70 .2 5Mondi. . . . . . . . . . . . . . . . . . . . . 33 5. 00 2. 00 3 61 .8 0 118 .2 5Monks Inv Tst. . . . . . . . . . . . . . .293.00 298.60 190.00Morrison Wm. . . . . . . . . . . . . . .277.40 +3.00 298.40 233.50Mothercare. . . . . . . . . . . . . . . . .682.00 +2.00 683.50 325.00Murray Intl Tst. . . . . . . . . . . . . . .765.50 6.00 800.00 512.00National Express . . . . . . . . . . . . .191.90 +1.20 294.83 78.45National Grid. . . . . . . . . . . . . . .679.00* +3.00 717.00 511.00Next. . . . . . . . . . . . . . . . . . . . .2083.00* +15.00 2094.00 1039.00Northumbrian Water . .. . . . .. . .270.30* 1.20 281.90 203.00Old Mutual. . . . . . . . . . . . . . . . .109.20 +0.10 122.30 30.50Pace. . . . . . . . . . . . . . . . . . . . . . 2 09 .0 0 + 1. 00 2 43 .8 0 3 9. 50Partygaming. . . . . . . . . . . . . . . .260.00 +3.90 298.50 157.25Pearson. . . . . . . . . . . . . . . . . . .891.00 +3.50 895.50 566.50

Pennon. . . . . . . . . . . . . . . . . . . .537.50 3.50 566.50 372.00Persimmon. . . . . . . . . . . . . . . . .469.50 +12.40 534.50 228.25Petrofac. . . . . . . . . . . . . . . . . .1043.00 +14.00 1078.00 320.75Petropavlovsk. . . . . . . . . . . . . .1026.00 12.00 1343.00 345.00Premier Farnell. . . . . . . . . . . . . .172.20 +0.80 180.90 112.50Premier Foods. . . . . . . . . . . . . . .35.70 0.65 47.00 24.00Premier Oil. . . . . . . . . . . . . . . . 1105.00 3.00 1431.00 512.78Provident Financial. . .. . . . .. . .928.00 7.00 986.00 736.00Prudential. . . . . . . . . . . . . . . . . .640.00 +9.50 665.00 195.40PZ Cussons. . . . . . . . . . . . . . . .270.00 +1.80 274.60 144.25Qinetiq. . . . . . . . . . . . . . . . . . . .162.40 0.60 179.10 123.00Randgold Resources . .. . . . .. .5000.00 +23.00 5450.00 2425.00Reckitt Benckiser . . . .. . . . .. .3356.00 +7.00 3364.00 2403.00Reed Elsevier . . . . . . . . . . . . . . .511.50 +3.50 570.00 403.75Regus. . . . . . . . . . . . . . . . . . . . . . 9 1. 50 + 2. 05 1 20 .5 0 4 3. 00Rentokil Initial. . . . . . . . . . . . . . .115.60 +1.70 119.70 37.25Resolution. . . . . . . . . . . . . . . . . .89 .40 +0.30 112.00 77.45Rexam. . . . . . . . . . . . . . . . . . . .290.60 +2.60 328.55 188.89Rightmove. . . . . . . . . . . . . . . . .504.50 +13.50 610.50 156.25Rio Tinto. . . . . . . . . . . . . . . . . .3390.00 +18.00 3437.50 1111.93RIT Capital Partners. .. . . . .. .1045.00 +8.00 1045.00 715.00Rolls Royce. . . . . . . . . . . . . . . .483.50* +1.70 504.50 252.50Rotork. . . . . . . . . . . . . . . . . . .1186.00 1.00 1267.00 667.50Royal Bank Of Scot. . . . . . . . . . . .29 .20 +0.12 58.25 10.00Royal Dutch Shell A. .. . . . .. .1882.00 +4.00 1944.00 1362.00Royal Dutch Shell B. .. . . . .. .1811.50 1897.00 1315.00RSA Insurance. . . . . . . . . . . . . .120.60 +0.80 150.20 113.10SABMiller . . . . . . . . . . . . . . . . .1826.00 13.00 1857.00 906.00Sage. . . . . . . . . . . . . . . . . . . . . . 2 20 .0 0 2 .1 0 2 39 .2 0 1 58 .9 0Sainsbury(J). . . . . . . . . . . . . . . .323.50* +4.70 373.00 284.50

Company Name Closing Price Price Change 52wk High 52wk low(p) (p) (p) (p)

Schroders. . . . . . . . . . . . . . . . .1330.00 +17.00 1348.00 628.00Schroders N/V. . . . . . . . . . . . . .1070.00 +10.00 1091.00 533.50Scot. & Sthrn Energy . . . .. . . . .1161.00 2.00 1279.00 357.50

Scottish Inv Tst. . . . . . . . . . . . . .448.50 1.50 451.00 324.75Scottish Mortgage. . . . . . . . . . . .539.00 541.50 284.00SEGRO. . . . . . . . . . . . . . . . . . . .344.60 +1.60 403.10 250.00Serco. . . . . . . . . . . . . . . . . . . . . 53 0. 00 + 5. 50 5 46 .5 0 3 41 .5 0Severn Trent. . . . . . . . . . . . . . .1086.00* 7.00 1236.00 921.00Shaftesbury. . . . . . . . . . . . . . . .393.60 +10.10 426.50 184.32Shire . . . . . . . . . . . . . . . . . . . . .1210.00 +2.00 1244.00 764.00SIG. . . . . . . . . . . . . . . . . . . . . . . 11 2. 10 1. 40 2 30 .0 0 8 2. 25Smith & Nephew. . . . . . . . . . . . .639.50 1.00 654.50 412.00Smiths. . . . . . . . . . . . . . . . . . .1014.00 +9.00 1014.00 646.50SOCO Intl. . . . . . . . . . . . . . . . .1340.00 2.00 1500.00 885.50Spectris. . . . . . . . . . . . . . . . . . .738.00 +9.50 763.50 376.75Spirax-Sarco Eng.. . . . .. . . . .1240.00 +13.00 1317.00 741.00Spirent Comms. . . . . . . . . . . . . .102.00 +0.50 102.40 32.00Sports Direct Intl. . . . . . . . . . . . . .97 .70 2.50 134.00 41.50SSL Intl. . . . . . . . . . . . . . . . . . . .785.00 +19.00 785.00 422.75St Jamess Place. . . . . . . . . . . . .246.00 4.00 296.90 142.75Stagecoach. . . . . . . . . . . . . . . . .169.50 1.30 173.80 102.75Standard Chartered. . . . .. . . . .1575.00 +18.00 1696.00 554.00Standard Life. . . . . . . . . . . . . . .216.50 +7.30 237.00 123.50Talvivaara Mining.. . . . .. . . . . .386.30 +1.80 428.00 113.00Tate & Lyle. . . . . . . . . . . . . . . . .432.70* 4.80 481.40 225.75Taylor Wimpey. . . . . . . . . . . . . . .38.90 +0.70 54.90 12.25Telecity. . . . . . . . . . . . . . . . . . . .383.00 +0.40 407.90 155.00Templeton Emrg Mkts. . .. . . . . .524.00 2.00 527.00 235.00Tesco. . . . . . . . . . . . . . . . . . . . . 42 8. 00 + 5. 00 4 37 .0 5 3 01 .4 0Thomas Cook. . . . . . . . . . . . . . .230.10 1.20 303.50 165.40Tomkins. . . . . . . . . . . . . . . . . . .193.20 4.30 199.70 99.50Travis Perkins. . . . . . . . . . . . . . .852.00 +32.50 888.00 198.63

TUI Travel. . . . . . . . . . . . . . . . . .255.00 +3.70 294.75 208.25Tullett Prebon. . . . . . . . . . . . . . .278.90 3.50 436.20 105.25Tullow Oil. . . . . . . . . . . . . . . . .1305.00 +8.00 1316.00 570.50UK Commercial Prop . . . . . . . . . . .78.50 +0.50 79.55 50.50Ultra Electronics. .. . . . .. . . . .1375.00 1.00 1399.00 1010.00Unilever . . . . . . . . . . . . . . . . . .1994.00 +3.00 2024.00 1226.00United Utilities. . . . . . . . . . . . . .495.70* 7.30 642.00 429.00Utd Business Media. . . .. . . . . .464.40 +9.70 540.00 364.75Vedanta Resources. . . . . .. . . .2611.00* +1.00 2634.00 492.75Victrex. . . . . . . . . . . . . . . . . . . .810.00 1.50 840.50 400.75Vodafone. . . . . . . . . . . . . . . . . .143.70* +0.25 148.00 111.20VT. . . . . . . . . . . . . . . . . . . . . . . 51 9. 00 * 11 .0 0 6 0 6. 00 4 12 .7 5Weir . . . . . . . . . . . . . . . . . . . . . . 7 17 .5 0 0 .5 0 77 1. 00 3 0 2. 00Wetherspoon(J.D.). . . . .. . . . . .425.00 0.10 551.00 270.00WH Smith. . . . . . . . . . . . . . . . . .494.00 18.00 551.00 306.75Whitbread. . . . . . . . . . . . . . . . .1411.00* +19.00 1425.00 686.50William Hill. . . . . . . . . . . . . . . . .185.70 4.90 243.25 141.04Witan Inv Tst. . . . . . . . . . . . . . . .444.60 +4.60 445.00 276.50Wolseley. . . . . . . . . . . . . . . . . .1247.00 +5.00 1570.00 907.03Wood Group (John) . . . . .. . . . . .308.80 +1.60 354.90 175.75WPP. . . . . . . . . . . . . . . . . . . . . . 6 09 .5 0 + 2. 50 6 20 .0 0 3 49 .7 5Xstrata. . . . . . . . . . . . . . . . . . .1121.00 +9.00 1175.00 288.75Yell Group . . . . . . . . . . . . . . . . . . . 39 .3 0 + 0. 78 8 6 .0 0 11 .7 5LONDON TOP 250 BY MARKET CAPITALISATION

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Company Name Closing Price Price Change 52wk High (p) (p) (p) (p )

5,000

5,200

5,100

5,300

5,500

5,400

14 Oct 3 Nov23 Oct 23 Nov12 Nov 11 Dec2Dec 22 Dec

5,412.8831 Dec

ANALYSIS l FTSE100

5,300

5,800

5,700

5,600

5,500

5,400

5,900

6,100

6,000

14 Oct 3 N ov23 O ct 23 Nov12 Nov 11 Dec2Dec 22 Dec

5,957.4331 Dec

ANALYSIS l Dax Index

110

100

90

80

70

120

130

1 Oct 1 Nov 1 Dec

88.004 Jan

at 1am UK time

ANALYSIS l Japan Airlines

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